The is the interest rate that a firm pays on any new debt financing.

Perpetualcold Refrigeration Company $($PRC$)$ can borrow funds at an interest rate of $11\mathrm{.}10\%$ for a period of four years. Its marginal federal$-$plus$-$state tax rate is $25\%.$ PRC$$s after$-$tax cost of debt is $($rounded to two decimal places$).$

At the present time, Perpetualcold Refrigeration Company $($PRC$)$ has $15-$year noncallable bonds with a face value of $$1,000$ that are outstanding. These bonds have a current market price of $$1,136\mathrm{.}50$ per bond, carry a coupon rate of $12\%,$ and distribute annual coupon payments. The company incurs a federal$-$plus$-$state tax rate of $25\%.$ If PRC wants to issue new debt, what would be a reasonable estimate for its after$-$tax cost of debt $($rounded to two decimal places$)?($Note: Round your YTM rate to two decimal place.$)$

$6\mathrm{.}88\%$

$9\mathrm{.}17\%$

$8\mathrm{.}79\%$

$7\mathrm{.}64\%$